China Expert

By Ron Cune

It is believed that China offers unprecedented possibilities for economic success in any sector. The country has a large well-educated population and employees work hard against competitive salaries. Roaring stories about business success follow one after another. City-life has improved dramatically and consumption is, after 20 years non-stop economic growth, still buoyant.
 
This ever-optimistic approach has, however, it downsides. Many entrepreneurs forget to stay alert. The low salaries and seemingly low costs per product made many entrepreneurs lazy in controlling the overall production standards. A recent McKinsey study under 30 multinationals showed that managers taking their job to easy were responsible for loss of production productivity and rising costs. The study showed cases where net profit lagged 20% to 40% behind the possibilities. In the long run, missing out
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Chinese Buyers’ Experience Of Western Companies

By Matthew Harrison

It is clear that Western companies are doing their utmost to market themselves to Chinese businesses.  Over half of all companies included in our study state that they have been targeted by ‘20 or more’ Western businesses within the last year alone.  41% of companies maintain that they are targeted by Western companies at least as frequently as they are by Chinese companies.  Whatever the views we arrive at in terms of the execution of Western marketing and sales campaigns in China, the determination of Western companies is beyond doubt.  Chinese businesses are now being targeted on a large scale not only as low-cost suppliers, but for their burgeoning purchasing power.

Means of communication – How well do Western businesses perform?
It is true to say that the most effective way of targeting a potential customer is not necessarily the way in which that potential customer asks to be targeted.  Nevertheless, it is informative to compare the approach of Western
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By Shaun Rein
This commentary is based on an article published on Forbes

In CMR’s latest thought leader position for Forbes, we show that e-commerce is actually booming in China, driven by changing demographic demands, especially from Chinese youth.  It is critical that companies begin to look at how to use the internet to drive sales.

1) Not only should companies utilize the internet for marketing purposes, but they should look at it as a critical sales channel to Chinese youth who are increasingly turning to the internet to buy not just cheap items like books and DVDs but more complex and expensive products like electronics, luxury items, and clothes.

2) Credit cards in circulation will grow 5-fold to 250 million by 2013.  The financial institutions that become the winners will be the ones that focus on customer service and develop strong loyalty programs.
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By David Hunter

Over the last 10 years, on-line purchasing by the general consumer has become commonplace. This trend will continue to grow at double-digit rates for the foreseeable future. Most of the products are high-quality brand names that are recognized by the public. This buying process saves money, transaction time, and allows buyers to return products for a variety of reasons at the supplier’s expense. This is all part of the doing business in America.

Although this works adequately for the general consumer, common sense mandates that it is not a process that would be recommended for manufacturing companies looking to outsource products or processes. Yet, many SMEs fall victim to the allure of on-line sourcing only to find out it costs them money, time
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By Ron Cune

In Europe most enterprises are highly specialized with a strong focus on their core business. Their market position and its core-competences are frequently monitored. In strategic reports terms like: ‘core business’, ‘specialization’, ‘focus’ etc. are hard to avoid.

Finding this kind of highly developed core-competence approach in Mainland Chinese companies is more the exception than the rule. Chinese designers and builders of sophisticated yachts can also be trading in rubber for car tiers at the same time. A well-known large transportation enterprise is into futures trading in Shanghai, manages real-estate and produces generic medicines. This kind of branch diversification is considered normal in China. Read the rest of “Branch diversification as Risk management tool” or post a comment